Next Generation IT Governance: Hold On Loosely, But Don’t Let Go | Gaining Altitude in the Cloud

Posted On January 27, 2012

In mid-February, I have the opportunity to join a great group of executives to debate how cloud computing will – nay IS – changing the way we need to think about IT governance. As you may know, Everest Group is chairing a track at CloudConnect in Santa Clara, CA, on Organizational Readiness. One of the sessions is slated to include Neal Sample of eBay, Bates Turpen of IHG, Thomas Barton of Novartis, and me discussing governance issues of today and tomorrow. We conducted a prep session last week, and I thought I’d share some of the topics we anticipate debating at CloudConnect.

  • Standards. One of the key pillars of capturing the value of cloud computing is the use of standard services to meet your needs. This raises the stakes for making the “right” choices early in your solution design and requires strong governance to ensure erosion of adherence to the standards is stopped in its tracks. Whether our discussion will start or end with a battle over the right approach to standards is unclear! What is the “half life” of standards decisions and how should you manage the balance of business and technical considerations that you will need to live with for some time? 
  • Hybrid IT environments. Most agree that large enterprises will evolve to IT environments that include non-cloud and cloud components. The cloud landscape will also likely include internal (private) cloud environments and external cloud environments (virtual private clouds, public clouds, and Software-as-a-Service solutions). Controversy will be apparent on how big an enterprise should bet on cloud as THE focus of its go-forward plan. How should you balance the governance needs of these diverse environments?
  • Governance intensity. Cloud environments create the opportunity (nightmare?) for independent initiatives to be executed quickly and out-of-sight of centralized governance processes.  Some think these pockets of innovation and initiative are central to leveraging the full power of the cloud; others suggest this is a step onto the slippery slope toward anarchy in terms of IT governance.  What is the right approach? 
  • Leadership. Who should take the lead in IT governance. There is a camp that suggests detailed technical decisions are shaped by governance decisions, so architects need to be in the middle of governance. Others argue that the business must set the vision and follow through to allocate resources consistent with those broad objectives or you’ll end up with disconnects that erode value from the outset. Sorting out these issues will be more than a sidebar skirmish! While most enterprises are likely to end up somewhere in the middle, how should you decide what decisions lean which way? 
  • Management paradigm shift. Many governance processes have been established for IT approaches that are driven by capital budget management; i.e., large, lengthy projects are the centerpiece of how resources are allocated and policy is set and administered. Cloud computing services turn that paradigm on its end as easy-on/easy-off solutions that require little/modest capital come to the forefront. This fight will extend far beyond IT, encompassing the CFO and BU leaders. How does this fundamental shift in the underlying economics and what needs to be managed change the governance requirements? 
  • Pace of change. The IT landscape has always been characterized by rapid change and short innovation cycles. However, cloud computing is accelerating this pace even more. With lower switching costs and innovation that presents opportunities to unlock ever-increasing value, the likelihood of opportunities to change directions increases with each service innovation. Risk takes on a whole new meaning in ways that will reveal fundamental differences of opinion that will light up the stage. How should an enterprise assess these opportunities? What must change in IT governance to accommodate the breathless pace of change inherent in the cloud?

With these topics in mind, the governance panel discussion at CloudConnect is certain to be lively and cover an array of challenging, if not controversial, issues.

If you have a particular area on which you’d like the panelists to share views, post a note to this blog and we’ll consider adding it to the list.

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